Community banks and credit unions must leverage digital tools to remain competitive and become the preferred bank for their customers
Florida’s financial institutions have a particularly strong growth opportunity to capture the loyalty of the state’s rapidly growing and diverse population
As the banking industry continues to undergo significant changes amid the rapid evolution of technology, Payments and Commerce Market Intelligence (PCMI) and Veritran’s “Becoming the Preferred Bank” report finds that technology adoption is crucial to the long-term success of community banks and credit unions. The research shows that becoming the preferred financial institution for customers requires a commitment to innovation, customer-centricity, and continuous improvement.
“Technology adoption is no longer just a nice to have, but essential in enabling community banks and credit unions to succeed in an increasingly crowded competitive landscape,” said Greynier Fuentes, VP of Sales & Digital Strategies at Veritran. “Taking a strategic approach to digital transformation can help drive customer loyalty, create the seamless user experience that consumers are demanding, and provide enhanced security – all of which are critical aspects to the long-term success of these institutions. Veritran is proud to offer solutions that will help financial institutions navigate these changes, ensuring they can serve their local communities for years to come.”
Strategic technology adoption can enhance security, increase loyalty and attract new customers
Community banks and credit unions play a critical role in keeping the US economy moving forward by providing access to credit and financial services to individuals and small businesses – and while many have deep roots in their local communities, there remains an opportunity for these institutions to deepen customers’ engagement with financial services and drive long-term growth.
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The report lists three key areas of action that will help credit unions and community banks gain a competitive advantage and drive customer loyalty:
- Implementing Tokenization: Tokenization replaces the customer’s card details with a unique digital identifier, or “token,” that is stored on their device, eliminating the need for a physical card and enhancing security. As 68% of respondents prefer to use the same card for all their purchases and approximately half report having been victims of fraud, tokenization and other fraud prevention measures are crucial to building customer loyalty, creating a secure environment for financial transactions and preventing financial losses.
- Creating a Smooth Digital Onboarding Process: Digital onboarding provides a streamlined process for opening accounts, online or through a mobile app, enabling a more efficient and user-friendly experience. Nearly 30% of all customers surveyed expressed their likelihood of abandoning the onboarding process if any difficulties arose and 40% indicated that ease of use was the most attractive feature of the onboarding process. By leveraging digital onboarding to create an efficient, smooth and user-friendly process, financial institutions can reduce the number of customers who abandon onboarding altogether, ultimately attracting and retaining more customers.
- Ensuring a Unified Customer Experience: Customers’ ability to seamlessly switch between online, mobile, and in-person banking without encountering discrepancies or confusion is increasingly necessary, with more than 60% of the survey respondents ages 18 to 25 stating that they use both online banking and mobile banking. The research finds that providing a seamless and integrated banking experience across all channels, including online and mobile, is necessary to build customer loyalty, reduce churn, and attract new customers.
“In Florida and beyond, the research shows that financial institutions need to invest in technology and innovation to create a superior banking experience, or risk losing customers to more tech-savvy competitors,” said Lindsay Lehr, Managing Director PCMI. “Becoming the preferred bank for customers requires a commitment to innovation and continuous improvement, and fortunately there are partners like Veritran to help financial institutions meet the demands of today’s consumers and ensure long-term growth.”
The study surveyed over 400 customers in Florida, whose primary financial institution is a tier 4 (assets less than $300M) or tier 5 (assets less than $100M) bank or a credit union. Additionally, five financial institutions were interviewed to gain insights into their perspectives on customer demands and the strategies they adopt to stay competitive in the market, emphasizing the study of the aforementioned three major trends: tokenization, digital onboarding and a unified customer experience.
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